Senior US officials have accused the new Iraqi government - which they previously championed - of failing to deal with the scourge of sectarian death squads, which are dragging the country into civil war.

Fresh figures published yesterday show that more than 250,000 Iraqis have been displaced by the sectarian violence since February. The details emerged in a week which, say US officials, has seen the highest number of suicide bombings recorded - half of them aimed at US-led forces.

As thousands of Iraqi and US troops continued to conduct cordon-and-search operations across the capital, a senior US officer for the first time publicly questioned prime minister Nouri al-Maliki's tactics for quelling the sectarian violence.

"We have to fix this militia issue. We can't have armed militias competing with Iraq's security forces. But I have to trust the prime minister to decide when it is that we do that," said Lieutenant General Peter Chiarelli, the second-highest-ranking American military official in Baghdad.

His comments echoed those of Major General James Thurman, commander of US military forces in Baghdad, who said last week he believed the question of militias was "a problem that the [Iraqi] government must deal with immediately".

Other senior US officials have begun warning that if the Iraqi government does not take a lead in disarming the militias, the US military might have to do so.

Despite a massive military effort in Baghdad to clear no-go areas of militants, much of the effort has focused on strongholds of Sunni fighters, and has so far had no impact on the slaughter. Instead, a record 7,000 Iraqis have died in the last two months alone. To add to US gloom it was revealed yesterday that the Bush administration is spending $2bn (£1bn) a week on the campaign in Iraq.

The latest political crisis has come as Iraq faces an escalating security crisis on three fronts: from the nationalist-inspired resistance to the US-led occupation, from al-Qaida and other jihadist groups which are behind most of the suicide attacks, and from a sectarian conflict between Shia and Sunni.

The lack of progress on disarming the militia death squads has been a source of growing tension between the US military and the Iraqi government. That frustration has focused in particular on an agreement between Mr Maliki's government and Jaish al-Mahdi, the militia of the Shia Sadr organisation, whose members are blamed for widespread sectarian murders.

Under the understanding, US forces have been instructed not to conduct aggressive military operations in Sadr City, Jaish al-Mahdi's stronghold, leading to accusations that a safe haven has been created for death squads.

Anecdotal evidence has emerged that within Sadr City, clerics and secretive sharia committees have been involved in "legitimising" the killings of Sunnis suspected of being involved in anti-Shia terror. It is said they are at times presiding over kangaroo courts before executions.

According to US officers interviewed by the Guardian, the decision not to confront the major source of the death squads was supported initially by the US because of fears of a full-scale battle with the militia in Sadr City.

"We are talking Berlin in '45 or Stalingrad," said one officer. "That is the conundrum. There is an unwillingness to tackle the problem head-on, but also a recognition that if we don't tackle the militias, death squad activities can only grow."

Instead, a decision was reached to try to bring political pressure to bear on the Sadr organisation, whose parliamentary bloc is crucial in supporting Mr Maliki's government, to bring its militia - illegal under the Iraqi constitution - into line. But with growing doubts over how much the Sadr organisation's leader, the firebrand preacher Moqtada al-Sadr, actually controls the factions within Jaish al-Mahdi, concerns are now growing about the wisdom of that policy.

"There are fractures politically inside Sadr's movement, many of whom don't find him to be sufficiently radical now that he has taken a political course of action," said a senior coalition intelligence official who spoke to reporters in Baghdad.

Sources close to Mr Maliki, defended the policy of political engagement with Jaish al-Mahdi and blamed Iraqi politicians with an interest in seeing Mr Maliki's government fail for fuelling the sense of crisis.

In a separate development a tape emerged yesterday from al-Qaida's leader in Iraq which said that 4,000 foreign insurgents had been killed since the US-led invasion in 2003. The man, who identified himself as Abu Hamza al-Muhajir - also known as Abu Ayyub al-Masri - called for chemical and nuclear weapons experts to join the insurgency by targeting large US bases in Iraq.